Kenneth Lonergan's 'Margaret': post-production in a courtroom

The film took three months to film and has run aground in the editing room -- for three years.

"You Can Count on Me" was the kind of Hollywood arrival that every aspiring filmmaker dreams about.

Kenneth Lonergan's 2000 directorial debut about two siblings' splintered relationship was a solid art-house hit, the film helped launch the career of costar Mark Ruffalo and was nominated for two Academy Awards -- lead actress for Laura Linney and original screenplay for Lonergan.

It was hardly surprising, then, that in early 2005 Fox Searchlight and financier Gary Gilbert ("Garden State") were eager to back Lonergan's second turn behind the camera, deciding to co-finance his complex account of a young girl's grappling with guilt and adolescence, "Margaret."

But although "You Can Count on Me" seemed blessed at almost every turn, "Margaret" has turned into a nightmarish production that has devolved into a bitter court fight. Despite "Margaret's" initial promise, it is now uncertain when Lonergan's movie, which was filmed more than three years ago, will ever make it to theaters.

Movie studio shelves are filled with troubled projects that have been put on hold for any number of reasons, but rarely do they involve someone of Lonergan's standing working with such quality actors ("Margaret's" cast includes Ruffalo, Matt Damon and Anna Paquin) and an all-star producing team of Oscar winners -- Scott Rudin ("No Country for Old Men") and the late Sydney Pollack ("Out of Africa").

More unusual still is why, according to one of the film's two lawsuits, "Margaret" hasn't come out: Lonergan can't finish the film.

Because of the litigation and a confidentiality agreement among the lawyers, all of the principals central to the film declined to be interviewed for this story. But conversations with a dozen people close to or familiar with the production, all of whom spoke on condition of anonymity, painted a picture of an endless post-production cycle that left Lonergan and Gilbert clashing and Fox Searchlight sitting on what might be an unreleasable movie.

A number of producers and editors -- including Rudin, Pollack and Martin Scorsese's legendary editor, Thelma Schoonmaker -- have tried but failed to help Lonergan complete his movie, court documents and interviews show. With his financing from Gilbert and Fox Searchlight cut off, Lonergan borrowed more than $1 million from actor and close friend Matthew Broderick (who has a small part in "Margaret") in an attempt to complete the editing of the movie, according to a person close to the production. (A Broderick spokesman said the loan was a private matter and disputed the dollar amount but did not provide another figure.)

The film's lengthy post-production sparked two lawsuits, which are scheduled to be tried in June and September. Last July, Fox Searchlight sued Gilbert and his production company, claiming he failed to pay the studio half of the film's production costs. Two months later, Gilbert's Camelot Pictures sued Fox Searchlight and Lonergan, alleging that the studio and Lonergan thwarted Gilbert's many attempts to finish the movie, forcing Camelot to pay for "a clearly inferior and unmarketable film" that Lonergan, several people say, will not support.

The quandary surrounding the $12.6-million "Margaret" comes at an awkward time for Fox Searchlight. The studio is riding high from the success of the global smash "Slumdog Millionaire," a best picture Oscar winner that the studio acquired as a largely completed film from the defunct Warner Independent Pictures. But Fox Searchlight, whose president, Peter Rice, just left to run Fox's television network, has a spottier record when it comes to movies it develops and finances, such as "Margaret."

Several people who have seen versions of "Margaret" say that, while the lengthy movie is not necessarily commercial, it does contain several great performances. Anne McCabe, who cut "You Can Count on Me" and was one of "Margaret's" editors, said Scorsese told her a 2006 version of the film was "brilliant, a masterpiece."

Fox Searchlight hopes the legal fighting can be resolved soon, so that it can submit the movie to film festivals. But one Fox executive says that, given all the problems with the film, the studio likes to pretend "Margaret" never happened.

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Creative differences

By some comparisons, the making -- and unmaking -- of a creative endeavor like "Margaret" has been told before. Filmmaker Elaine May and a small squadron of editors spent a year cutting 1976's "Mikey and Nicky." May's Peter Falk-John Cassavetes film came out surrounded by lawsuits, more than a year late and more than double its budget.

"Mikey and Nicky" was eventually released. "Margaret," on the other hand, remains in legal limbo, and even if the lawsuits are settled or tried, Lonergan still hasn't finished the movie to his liking, according to several people close to the production. If more time passes, what was once a contemporary drama could soon become a period piece.